Housing market slows to 2008 level

Activity in the housing market slowed last year to its weakest level since
2008, according to a respected measure, as worries about the economy and
problems scraping together a big enough mortgage deposit weighed on demand.

Overall, there were 630,389 home sales in 2011, some 4pc fewer than in the previous year, the figures showed.Photo: Getty Images

The number of property "hotspots" – towns which experienced a rise in sales numbers – halved in 2011, dropping to its lowest level since the height of the financial crisis, according to new research by Lloyds TSB.

Just 40pc of the 500 towns tracked by its survey in England and Wales recorded a rise in home sales last year, representing the smallest share of the market since the crash of 2008, when all towns recorded a fall in sales.

Overall, there were 630,389 home sales in 2011, some 4pc fewer than in the previous year, the figures showed.

Northern towns saw the biggest pick-up in sales volumes, accounting for 59pc of the towns which saw an increase. This represented a reversal of 2010's trend, when southern towns accounted for the majority of the property sales hotspots.

However, researchers said this northern pick-up came from a historically low base and that, generally, property prices in the north continue to be weaker than in the south.

Between 2010 and 2011, there was a 4.5pc fall in house prices among the 10 towns that recorded the biggest rises in property sales, indicating the boosts to sales volumes usually came at the expense of the prices achieved.

"The overall level of housing market activity across England and Wales has weakened over the past year, reflecting the concerns over the outlook for the UK economy," said Suren Thiru, housing economist at Lloyds TSB.